Long time P&amp;S shooter, finally moving to SLR, or trying to figure out the best way to do so.

I have decided on Canon over Nikon and the other choices, obviously since this IS the Canon forum.

I shoot a variety of things: landscape, portrait, indoor, outdoor. I do not really shoot sports but do like to capture live action of people in the city.

Here is my dlemma, what do I need vs what do I want within a realistic budget. I would LOVE to spend around $3,000, or so,for body and the beginning of a lens set. If it gets to be much more, I am going to have to spread it out, not that I think I will be done after this initial buy anyways.

Are the differences between the 40D and the XSI worth the cost difference for a new SLR user? Is ISO 3200 vs. 1600 worth the cost? Is the XSI (rebel) line durable? I know that the D line is very solid, I am concerned about this with the XSI.

Will I be ok with the 70-200 f4L? I would love the f2.8 IS, but that is a bit our of the budget right now. I am looking to use this lens outside in avergare to good light. On this topic wouldyou choose the70-200 4L IS or the 70-200 2.8 if you had $1100 to spend on one lens?

If I get the 40D, which I am leaning towards, I am going to have to wait on the prime lens (85 or even 100), will the 17-55 f2.8 be sufficient for indoor portrait/archetecture?

The reason I am trying to fill in as much as possible now is that we are going to europe for 2.5 weeks in September and I would like to have the bases covered for that trip.

I realize that all of the data on teh XSI is theoretical as it is not available until April, but I am sure people already have an opinion based on the specs...

Both kits sound good. A big factor will be ergonomics. There is a definite difference between xxD and xxxD cameras. I would handhold both (or at least xti since xsi might be hard to get ahold of). That may drive you one way or the other. I personally don't like the plastic or the feel of the xxxD series but others prefer the smaller package. The two lenses you're considering are great options - very high optical quality.

Now, 70-200 f4 IS vs 70-200 2.8 - that's a big "it depends". The 2.8 is more versatile in that you can get shallower DOF or shoot non-still subjects in lower light (note, not necessarily sports but any subject that might move). Versus the lighter f4 lens.

I'm of the camp that the benefit of IS is completely overblown. I personally don't see the usefullness of 70-200 f4 IS over the non-IS for $450 less. There just aren't many real-life situations I'm in where I want to shoot a 70-200 at slow shutter speeds without flash.IMO that $450could be much better spent. But everyone is different. You may find a need for it. That's a tough decision to make BEFORE you have a particular photographic style.